September 2002 issue Pharmacy Today magazine
HEALTH PAC SEEKS $1.8m
The dismemberment of four companies founded by pharmacist Ken Szeto is revealing how the companies operated and how they came to grief. Kentra Group along with Kentra Med Ltd and Kentra Clinical Ltd (both owned by Kentra Group) were put into liquidation after Health PAC (formerly Health Benefits) stopped subsidy payments to the medication management companies.
Ken Szeto's "closed door" Lower Hutt pharmacy, Medication Centre, is also being wound-up. Ken Szeto and Health PAC, which is investigating Medication Centre, have refused to comment on the companies' demise or any details of the investigation.
According to the liquidator's report on Medication Centre, Health PAC is seeking the repayment of claims of around $1.8 million. Liquidator Terry Bastion says total liabilities of all companies have yet to be assessed. His initial report on the Medication Centre showed the company provided medication packaging and medication for institutions such as rest homes and prisons on contract to DHBs and paid out through Health PAC.
These services were provided through a charging arrangement with Kentra Med Ltd, which held contracts with the institutions for the use of the patented Kentra Medication packaging and IT systems. Pharmaceutical Review Services (PRS) were provided through a claiming agreement with Kentra Clinical Services.
Health PAC began investigating the PRS claims late last year.
On June 4 this year, Health PAC contended claims made since November 2001 had been in breach of contract. Health PAC advised it was seeking $1.8 million repayment for claims dating back to November 2001 and no further claims would be paid out until the $1.8 million was repaid. The next day, Medication Centre went into liquidation and the other three companies soon followed. Around $912,000 is owed to Medication Centre creditors, with $900,000 of that owed to unsecured creditors.
According to the report, only $220,000 is available to unsecured creditors. But this doesn't take into account Health PAC's $1.8 million claim and assumes Health PAC will settle claims for services frozen on June 4. No liquidator's report for Kentra Group has been issued. Under the Companies Act, no report is required because payments to unsecured creditors will be less than 20 cents in the dollar.
Kentra Group has 67 shareholders, comprising family trusts, companies and individuals. The two largest are the KC Szeto Family Trust and the Wright Family Trust, owning 1.48 million of the 3.2 million shares, and represented on the board by directors Ken Szeto and Peter Wright. Health PAC (formerly Health Benefits) says its investigation will take at least another month.
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